Appeals Court: Obama Admin Can Force Hobby Lobby to Obey HHS Mandate

A federal appeals court ruled today that the Obama administration can force the Christian-owned-and-operated business to obey the HHS mandate that compels it to pay for birth control and drugs that may cause abortions for its employees.

The ruling also rdered the Obama Administration to report back every 60 days—starting in mid-February—until the Administration makes good on its promise to issue a new rule that protects their religious freedom. The Obama administration was ordered to rewrite the mandate by March 2013.

Today, following a new ruling by the 8th Circuit federal appeals court granting temporary relief from the HHS Mandate to a Missouri business, the 10th Circuit denied Hobby Lobby’s request for identical relief in their appeal. The company is concerned about crippling fines of up to $1.3 million per day if they do not comply with the HHS mandate against their religious beliefs.

The lower court, which, in November, denied Hobby Lobby emergency relief, relied heavily on the lower court’s dismissal of the O’Brien Business’ case on its ruling. When a federal appeals court reversed the lower court decision in the Missouri case, Hobby Lobby’s attorneys hoped the 10th circuit will reverse in its case as well.

The privately held retail chain with more than 500 arts and crafts stores in 41 states filed a lawsuit against the Obama administration over its HHS mandate. The company says it would face $1.3 million in fines on a daily basis starting in January if it fails to comply with the mandate, which requires religious employers to pay for or refer women for abortion-cause drugs that violate their conscience or religious beliefs.

“Today’s shocking decision from the 10th Circuit is an utter rebuke of religious freedom. Hobby Lobby now faces fines of up to 1.3 million dollars a day if it’s owners refuse to violate their consciences by paying for and providing abortion-causing drugs for its employees. This is a dereliction of duty of the part of the courts to protect IRS citizens from bureaucratic bullies who care little for the First Amendment,” said Ashley McGuire, Senior Fellow with The Catholic Association.

The lawsuit was filed in the US District Court for the Western District of Oklahoma and U.S. District Judge Joe Heaton issued a ruling rejecting Hobby Lobby’s request to block the mandate. Judge Heaton said that the company doesn’t qualify for an exemption because it is not a church or religious group.

“Plaintiffs have not cited, and the court has not found, any case concluding that secular, for-profit corporations such as Hobby Lobby and Mardel have a constitutional right to the free exercise of religion,” the ruling said.

Heaton wrote that “the court is not unsympathetic” to the company’s desire to not pay for abortion-causing drugs but he said the Obamacare law “results in concerns and issues not previously confronted by companies or their owners.”

The appeals brief reads in part: “[I]n less than six weeks, [the Green family] must either violate their faith by covering abortion-causing drugs, or be exposed to severe penalties—including fines of up to $1.3 million per day, annual penalties of about $26 million and exposure to private suits.”

“The district court accepted that the Green family engages in a religious exercise by refusing to cover abortion-causing drugs in their self-funded health plan. There was thus no question that the Green family engages in ‘religious exercise,’” it adds. “[T]he Supreme Court has long rejected any distinction between “direct” and “indirect” burdens in evaluating whether regulations infringe religious exercise.”

“Every American, including family business owners like the Greens, should be free to make a living without forfeiting their religious beliefs,” said Kyle Duncan, General Counsel for the Becket Fund for Religious Liberty, which represents Hobby Lobby. “The Green family needs relief before Jan. 1, and so we have asked the federal appeals court in Denver to issue an injunction against the mandate.”

Duncan said the judge’s decision did not question that the Green family has sincere religious beliefs forbidding them from providing abortion-causing drugs. The court ruled, however, that those beliefs were only “indirectly” burdened by the mandate’s requirement that [Hobby Lobby] provide free coverage for specific, abortion-inducing drugs in [the company’s] self-funded insurance plan.

Duncan previously talked about what the Obama administration told the court:

The administration’s arguments in this case are shocking. Here’s what they are saying: once someone starts a “secular” business, he categorically loses any right to run that business in accordance with his conscience. The business owner simply leaves her First Amendment rights at home when she goes to work at the business she built. Kosher butchers around the country must be shocked to find that they now run “secular” businesses. On this view of the world, even a seller of Bibles is “secular.” Hobby Lobby’s affiliate, Mardel, sells Bibles and other Christian-themed material, but because it makes a profit the government has now declared it “secular.”

The administration’s position here — while astonishing — is actually consistent with its overall view of the place of religion in civil society. After all, this is the administration who argued in the Hosanna-Tabor case last year in the Supreme Court that the religion clauses of the First Amendment offered no special protection to a church’s right to choose its ministers — a position that the Court rejected 9-0. This is the administration which has taken to referring to “freedom of worship” instead of “freedom of religion” — suggesting that religious freedom consists in being free to engage in private rituals and prayers, but not in carrying your religious convictions into public life. And this is the administration who crafted a “religious employer” exemption to the HHS mandate so narrow that a Catholic charity does not qualify for conscience protection if it serves non-Catholic poor people.

As you point out, the administration is trying to justify its rigid stance against religious business owners by saying otherwise they would become a “law unto themselves,” and be able to do all sorts of nasty things to their employees — like force them to attend Bible studies, or fire them if they denied the divinity of Christ. Nonsense. Hobby Lobby isn’t arguing for the right to impose the Greens’ religion on employees, nor for the right to fire employees of different religions. There’s already a federal law that protects employees from religious discrimination and that’s a very good thing. This case is about something entirely different: it’s about stopping the government from coercing religious business owners. The government wants to fine the Greens if they do not violate their own faith by handing out free abortion drugs, and now it’s saying they don’t even have the right to complain in court about it.

Duncan said the onerous provisions of the HHS mandate “will hit Hobby Lobby in about two months — on January 1, 2013. At that point, it will face the choice of dropping employee health insurance altogether (and paying about $26 million a year in penalties), or continuing its current plan (which will expose it to about $1.3 million in fines per day). So it is not hard to imagine why the Greens felt they had no choice but to go to court.”

There are now 40 separate lawsuits challenging the HHS mandate, which is a regulation under the Affordable Care Act (aka “Obamacare”). The Becket Fund led the charge against the unconstitutional HHS mandate, and along with Hobby Lobby represents: Wheaton College, East Texas Baptist University, Houston Baptist University, Belmont Abbey College, Colorado Christian University, the Eternal Word Television Network, and Ave Maria University.

Hobby Lobby is the largest and the biggest non-Catholic-owned business to file a lawsuit against the HHS mandate, focusing sharp criticism on the administration’s regulation that forces all companies, regardless of religious conviction, to cover abortion-inducing drugs. It has faced a small boycott from liberals upset that it would challenge the mandate in court.

The Obama admin says there is an exemption in the statute but Duncan says that is not acceptable.

“The safe harbor’s protection is illusory,” said Duncan. “Even though the government won’t make religious colleges pay crippling fines this year, private lawsuits can still be brought, schools are at a competitive disadvantage for hiring and retaining faculty, and employees face the specter of battling chronic conditions without access to affordable care. This mandate puts these religious schools in an impossible position.”

Recently, a federal court stopped enforcement of the Obama administration’s abortion pill mandate against a Bible publisher which filed a lawsuit against it — the third such victory.